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National Income Accounting — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsNational Income Accounting3 Marks
Question
Differentiate between gross value added and net value added.
✓

Answer

S. No
 Basis
Gross Value
Net Added Value Added
1.
 Meaning
It refers to the gross value added by an enterprise during the process of production. It includes cost of excludes cost of wear and tear fixed capital.
It refers to the net value added by an enterprise during the process of production. It excludes cost of wear and tear, i.e., of consumption of fixed assets.
2.
 Formula
Gross value added = Value of output value of interme diate inputs.
Net value added = Gross value added consumption of fixed assets.
3.
 Production
It does not indi-cate the actual amount of production.
It indicates the actual amount of production.

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